Lenovo Shakes Up Executive Ranks Again Amid Slumping Sales

Lenovo has rearranged its executive roster again, saying it has moved Gerry Smith from his position atop the company's Data Center Group into a role as executive vice president and COO of the PC and Smart Devices unit.

Smith had become head of the Data Center Group last March to replace Jay Parker after he left to take a position at Dell. Lenovo said it has hired former Intel senior vice president Kirk Skaugen as Data Center Group president, Smith's former role.

In addition to Skaugen, Lenovo hired Laura Quatela, a former Alcatel-Lucent executive vice president, as chief legal officer, and Yong Rui as chief technology officer. He comes from Microsoft Research Asia, where he was a managing director.[

[Related: Lenovo Channel Chief Kinlaw On Life After Chris Frey And The Hyper-Converged Opportunity]

The moves are the latest in a series of executive changes, and they come as Beijing, China-based Lenovo faces sales declines across its businesses. The company reported Thursday that second-quarter Data Center Group sales were down 8 percent year over year. Mobility sales were down 12 percent in the same time period, and sales of PCs, where Lenovo typically dominates, were also down 8 percent.

The declines leave Lenovo clinging to its market-leading position in the PC market by a thread while competitors including HP Inc. and Dell gain ground. The company has also struggled to implement an effective strategy in the data center since buying IBM's x86 server business for $2.3 billion in cash and stock about two years ago.

Lenovo's share of the server market lags stalwart hardware market competitors including Hewlett Packard Enterprise, Dell EMC and IBM, although Lenovo does have hyper-convergence partnerships with red-hot startups Nutanix and SimpliVity, as well as a newly inked storage partnership with Nimble Storage.

Thursday's personnel moves come less than a month after Lenovo confirmed the departure of Chris Frey, the company's high-profile commercial sales chief, just 18 months after he took that job.

Michael Goldstein, CEO of LAN Infotech, a Fort Lauderdale, Fla.-based solution provider that works with Lenovo, said he doesn't worry about the turmoil among the company's executive personnel. For him, the bottom line is that LAN Infotech is successful selling Lenovo PC products in an increasingly competitive market.

"They're putting out great products," Goldstein said. "The personnel side doesn't always concern me. We don't always know what the big plan is, but they're just trying to find the right mix, the right person at that time."

While LAN Infotech's Lenovo business is growing, Goldstein said the PC market is very challenging for vendors faced with a customer base that has very little concern for the logos on the gear they buy.

"It's hard. Some people have their brand favorites, and they need a reason to change," Goldstein said.

"But you can be at a prospect, show a few different things, and they're not thinking brand. It's not one product, it's one product for one group of people, and another product for another group. They want to find the best fit for the right person, so some might like the [Lenovo] Yoga, or the [Microsoft] Surface, or the [Dell] XPS 13," he said. "They like the functionality. They don't actually care about the brand. They want the best product for the user, and that's different from what we've seen over the years. That makes the vendors very competitive. Customers aren't saying, 'Well, this laptop is $100 less.'"